The High Court found that First Active had established its counterclaim for the full sums claimed against four companies in the Cunningham Group and its claim under a personal guarantee from Brian Cunningham. The court left one limited issue open: First Active must file affidavit evidence to establish that certain sale proceeds were properly credited or set off. The judgment did not state final orders or decide what would happen to the guarantee claim after a separate amendment application in the RBS proceedings.
The judgment, delivered by Mr Justice Clarke on 9 July 2010, dealt with issues left over from earlier proceedings. The four companies facing the counterclaim were Moorview Developments Limited, Salthill Properties Limited, Valebrook Developments Limited and Springside Properties Limited. First Active said the companies owed money under loans and cross-guarantees. It also sued Cunningham personally under a guarantee.
First Active’s witness, John Collison, gave evidence about the balances to 30 April 2010. The schedules showed a combined balance of €60,737,862: €33,649,554 for Salthill, €26,575,846 for Moorview, €1,009,776 for Valebrook and a credit balance of €487,314 for Springside. Clarke accepted Collison’s evidence and rejected the companies’ general challenge to the bank’s calculations. He found the bank records and Collison’s testimony sufficient to establish the claim, subject to specific points raised about certain sums.
The court rejected arguments that the debt should be reduced by the estimated value of unsold secured property, or that the price allocated to the residential part of a Salthill development had been shown to be too low. The court said credit for security depended on money actually being realised. It was not satisfied on the evidence that the allocation between residential and commercial portions was inappropriate.
On the guarantee, the document referred to “Moorview Properties Limited”, although the relevant borrower was Moorview Developments Limited. Clarke found this was a clear mistake and that the intended company was clear from the surrounding loan documents and evidence that Moorview Properties had never existed. The guarantee was capped at the euro equivalent of IR£1.5 million. The court found Cunningham liable up to that cap, subject to establishing the companies’ liabilities and the possible effect of the RBS amendment application.
A separate dispute concerned whether certain sale proceeds had been credited to the companies’ accounts or set off against sums due to receiver Ray Jackson. Because the point had not been raised in advance, Collison had not been able to identify the supporting records during cross-examination. Clarke allowed First Active to file affidavit evidence on the issue and said cross-examination could follow if the companies showed a realistic basis for it. The judgment’s conclusion on the full claims was expressly subject to that evidence.